The American state of Nevada has been chosen as the official site for Tesla's upcoming electric vehicle battery factory behemoth.

Originally reported earlier this week, Nevada was believed to be the top choice for Tesla's Gigafactory -- a research facility and developer of electric vehicle batteries designed to span across 10 million square feet. The site will employ approximately 6,500 people, and the investing companies -- Tesla and Panasonic -- hope the factory will be operational by 2017.

"This is great news for Nevada. Tesla will build the world's largest and most advanced battery factory in Nevada which means nearly one hundred billion dollars in economic impact to the Silver State over the next twenty years. I am grateful that Elon Musk and Tesla saw the promise in Nevada. These 21st century pioneers, fueled with innovation and desire, are emboldened by the promise of Nevada to change the world. Nevada is ready to lead."

The so-called Tesla Gigafactory will produce battery cells, modules and packs for Tesla electric vehicles (EVs), and the automaker predicts the factory will be shipping out 35GWh of cells and 50GWh of packs per year by 2020, as well as producing EVs suitable for the general public at a base price of $35,000.

Tesla's Gigafactory will also be used for research purposes. Bringing down the cost of EV batteries means the savings can be passed on to consumers -- which in turn may improve adoption rates -- and it is hoped that battery performance will also climb, eventually allowing an EV to go up to 200 miles on a single charge.

"I would like to recognize the leadership of Governor Sandoval and the Nevada Legislature for partnering with Tesla to bring the Gigafactory to the state. The Gigafactory is an important step in advancing the cause of sustainable transportation and will enable the mass production of compelling electric vehicles for decades to come. Together with Panasonic and other partners, we look forward to realizing the full potential of this project."

According to the Reno Gazette-Journal, Nevada's financial incentives for Tesla to choose the state amount to roughly $1.25 billion spread over 20 years. The publication says the generous tax incentives include sales tax abatement, property tax abatement, transferable tax credits, job-based tax credits and discounted electricity rates. In return, Tesla must own at least $3.5 billion in "manufacturing equipment and real property" within Nevada, and must contribute $7.5 million a year to the US state's educational system.